It does, but currently is supported only in Chromium-based browsers. Also with pre-rendering on hover pages are displayed instantly unlike with instant.page where rendering happens on link click which might take a few hundred ms before displaying the page.
Update: Actually instant.page also uses Speculation Rules API where it's supported
It preloads pages on mouse hover over the a href link. On mobile there are no mouse hover events. The page can be preloaded on "touchstart" event which almost definitely results in page visit.
It probably won't replace Nuxt.js/Nuxt’s pre-fetching, as such websites function as SPAs, using internal JavaScript pushState navigation, which has become standard for those frameworks.
However, Next.js pre-fetching can't perform pre-rendering on hover, which can cause a noticeable lag during navigation. The native Chrome API allows not only pre-fetching, but also pre-rendering, enabling instant page navigation.
When comparing to Iframe our JS-based solution better adopts to the existing page layout due to the fact that it embeds into the existing page DOM (when iframe lives in it's own DOM which brings many limitations). Also it loads much faster than any equivalent iframe solution